The Euribor closes January marking a new historical low: -0.5%. With this panorama, the number of mortgages that should have negative interest continues to rise, but banks have already openly said that they refuse to paycustomers for their negative interest loans. Will consumers have to accept or will the courts begin to take action at some point?
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In many of the mortgages signed between 2006 and 2010, the applicable spread is less than 0.5%, so that, in a scenario with the Euribor at these levels, many mortgages will have a negative interest rate when the time comes for the review. This is what they explain from the Organization of Consumers and Users (OCU), who consider that in these cases “entities should apply the corresponding interest after the review, although it is negative “and that” compliance with the contract cannot be left to the discretion of one of the parties just because the result is unfavorable to them. “
But the banks have already said that nothing of that. Bankinter, for example, see it a “nonsense”. “It is as if the lender of a service has to provide a service and, also, pay for it to the recipient of the service. It is like the world turned upside down,” said recently its CEO, María Dolores Dancausa. BBVA hides in what “legally, it is not possible”. “The new mortgage law establishes that interest is only charged by the creditor. Before 2019, the Commercial Code governed and there was a specific clause that also said that the payment of interest corresponds only to the creditor, so we do not believe that there is a real risk there “, says its CEO, Onur Genç.
Is this really so? As confirmed by the Bank of Spain, before the entry into force of Law 5/2019, there is no regulatory provision in the Spanish legal system that regulates the possible application of negative interest rates in mortgage transactions with consumers. Thus, the organism refers to the judicial interpretation the fulfillment of the loan contract because it is private.
This means that if the courts were to rule on the matter in the future, there could be two scenarios. One in which the sentences were favorable to the clients, where banks would have to apply the corresponding negative interest. It would then be necessary to calculate how much money would be generated by these negative interests and they would have to pay it to the mortgaged, probably through a discount in the monthly payment. The other scenario would occur in the case that the courts were positioned in favor of the bank, in which the entities would continue applying a rate of 0%. This is how they detail it from the financial comparator HelpMyCash, which recalls, yes, that “in any case, those who have a minimum interest on their mortgage, a floor clause, a negative interest could never be applied to them, nor to those who signed their loan as of June 16, 2019, since a minimum rate of 0% is applied to these, by law, “.
Between two waters the European Banking Authority (EBA) moves, which a few months ago recognized that banks should respect contracts and apply those rates below 0%, but provided they did not exist “legal restrictions”.
If JP Morgan’s predictions come true, the index to which most mortgages in Spain are referenced will remain negative, at least until 2023. For now, at the end of January, the Euribor adds its sixth consecutive all-time low and its eighth month in a row down after several months up, coinciding with the outbreak of the Covid-19 pandemic.
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